How To Get a State Tax Extension in Indiana

The state of Indiana requires that state tax returns be filed by April 18, 2011, for the 2010 tax year. An approved extension will give you an additional two months to submit your return if you owe and an additional seven months to submit your return if you are expecting a refund. This means that you will have until June 18 or November 18 to file your tax forms, depending on the result of your tax form.http://www.in.gov/dor/files/ib18.pdf  

It should be noted, however, that an extension is not an extension of time to pay an outstanding tax balance. If you will owe additional taxes with your state return, you must still remit them by April 18. If you do not make a payment before this date, you will be assessed a late filing penalty as well as compound interest on the amount due until it is paid in full. Receiving an extension and remitting full payment will spare you from these charges.http://www.in.gov/dor/3811.htm

Before getting started on your forms, collect all of the information you need to file your extension. This will be the same documents needed to prepare your state return, so keep them in a handy place for easy access later. You will need the following:

1. The total earned income you received - If you are employed, use your total taxable wages as reported on Form W-2 or Form 1099. If you are self-employed, add up your gross earnings and deduct any eligible business expenses you can claim.
2. The total unearned income you received that is also subject to state tax - Examples include unemployment compensation, lottery winnings, pension payments and bank interest.
3. Your state income tax payments made during the year - If you are employed, these will appear on Form W-2 as state taxes withheld. Self-employed taxpayers will need to add up their estimated tax payments made.
4. A copy of your federal income tax return, if you will be filing one
   

To calculate your state tax liability in step 2, you will begin from your federal adjusted gross income, or AGI, so complete that form before you begin this process. If you will not be filing a federal tax return at this time, you might want to consult a tax professional for assistance figuring your AGI.http://www.in.gov/dor/3811.htm 

To complete the extension application, you will need the following:

1. Your Social Security number
2. Your current mailing address
3. The full name and Social Security number of your spouse, if you will be filing a joint tax returnhttp://www.in.gov/dor/3811.htm

Your next step is to figure the amount of additional state tax you will owe, if any. To do so, you will need to get a paper copy of Form IT-40 "Indiana Full Year Resident Individual Income Tax Return" and the tax form instruction booklet. Both of these can be downloaded from the Indiana Department of Revenue website or obtained from the local library.http://www.in.gov/dor/4439.htm  

Begin the form by entering the amount of your federal adjusted gross income from IRS Form 1040 on line 1 of the Indiana return. Now, take a moment to read the tax form instructions, paying special attention to income adjustments and state tax credits you may qualify for. On lines 2 through 4, make any necessary adjustments to income. On line 5, calculate your Indiana adjusted gross income.http://www.in.gov/dor/4439.htm 

Next, complete Schedule 3 to account for your Indiana exemptions. Enter the total from this form on line 6 and subtract it from the amount on line 5 to arrive at your total taxable income. Multiply this total by the flat tax rate of 3.4 percent to calculate your total state tax owed on your income. Enter this total on line 8 and account for any additional taxes on lines 9 and 10.http://www.in.gov/dor/4439.htm 

Next, subtract your qualifying state tax credits and the amount of your state income tax payments made through withholding or estimated state tax payments. Your end result will be either an overpayment resulting in a refund or an underpayment resulting in a balance due.http://www.in.gov/dor/4439.htm 

The final step to requesting an Indiana state tax extension is to complete a written form. Indiana's required form is entitled Form IT-9 "Application for Extension of Time to File Indiana Form IT-40". This form is also available for download on the Indiana Department of Revenue website. If you prefer to make your request electronically, you can file your form and make any payment due on the state website.http://www.in.gov/dor/4439.htm 

Unlike many other states, Indiana requires that everyone who requests an extension complete this form. Even if you are due a refund or if you owe no additional tax, you will need to submit this written request. Complete the form by entering your full name and Social Security number as well as your spouse's. Fill in your current mailing address.http://www.in.gov/dor/4439.htm If you have received a federal tax extension, you do not need to complete Form IT-9.http://www.in.gov/dor/files/ib18.pdf 

Complete Part 1: Payment Information if you have an additional balance due. To do so, complete the worksheet included with the request using the information you calculated in step 2. If you do not have a balance due, check the box next to Part 2: Nonpayment Information to show that you are not enclosing a payment.http://www.in.gov/dor/4439.htm 

Make a copy of the completed form for your own financial records. Enclose the request, along with a check or money order for at least 90% of any balance due, in an envelope and send it to the address on the request. Be sure to submit both before April 18.http://www.in.gov/dor/4439.htm Once you remit payment, you should begin your state return.